Abstract:

This paper defines business ethics as a series of behaviors that adhere to values held by the
individual manager, the manager's supervisors and subordinates, general society and, most
importantly, the manager's customers and clients. The concept of business ethics is explored
through several levels of business organizations and operating environments.
The paper then examines recent evidence of the decline in business ethics by noting a few
examples involving Beech-Nut, Hertz, Michael Milken, E.F. Hutton, Sears, Salomon Brothers,
Dalkon Shield, Exxon Valdez, S&L scandal, brokerage analysts. Surveys are cited to indicate
that the American public believes that business ethics are declining.
To further analyze the topic, the author reports on a series of structured interviews with managers
in a variety of organizations. Fourteen senior managers were interviewed: 4 from large county
government, 3 from state government, 4 from large corporations, 3 from small businesses. The
managers were asked their opinions concerning the decline of business ethics, and for their
recommendations to possibly retard the decline. All managers said they believed that ethics are
in decline and that the public believes ethics are declining.
The recommendations for retarding or reversing the decline yielded several suggestions: teach
ethics in schools and business organizations, develop and enforce Codes of Ethical Conduct
within all organizations, establish better monitoring and reporting mechanisms, and hire ethical
managers.
The paper builds on the interview results by coupling the managers' remarks with admonitions
from many authors: while teaching ethics and Codes of Ethical Conduct are important, the most
important factor is the ethical behavior of managers (leaders). Ethical leadership is fundamental
since ethical behavior is an individual - not a corporate - matter. In practice, ethics is not
something that a manager “does”; it is something that the manager “is”.

This paper defines business ethics as a series of behaviors that adhere to values held by the
individual manager, the manager's supervisors and subordinates, general society and, most
importantly, the manager's customers and clients. The concept of business ethics is explored
through several levels of business organizations and operating environments.
The paper then examines recent evidence of the decline in business ethics by noting a few
examples involving Beech-Nut, Hertz, Michael Milken, E.F. Hutton, Sears, Salomon Brothers,
Dalkon Shield, Exxon Valdez, S&L scandal, brokerage analysts. Surveys are cited to indicate
that the American public believes that business ethics are declining.
To further analyze the topic, the author reports on a series of structured interviews with managers
in a variety of organizations. Fourteen senior managers were interviewed: 4 from large county
government, 3 from state government, 4 from large corporations, 3 from small businesses. The
managers were asked their opinions concerning the decline of business ethics, and for their
recommendations to possibly retard the decline. All managers said they believed that ethics are
in decline and that the public believes ethics are declining.
The recommendations for retarding or reversing the decline yielded several suggestions: teach
ethics in schools and business organizations, develop and enforce Codes of Ethical Conduct
within all organizations, establish better monitoring and reporting mechanisms, and hire ethical
managers.
The paper builds on the interview results by coupling the managers' remarks with admonitions
from many authors: while teaching ethics and Codes of Ethical Conduct are important, the most
important factor is the ethical behavior of managers (leaders). Ethical leadership is fundamental
since ethical behavior is an individual - not a corporate - matter. In practice, ethics is not
something that a manager “does”; it is something that the manager “is”.